1
Ms. Sudjit InthaiwongDeputy Secretary Geneal
Thailand Board of Investment Bangkok, 2007
Automotive InnovationAutomotive InnovationForum Asia 2007Forum Asia 2007
ThailandThailand
A Competitive LocationA Competitive LocationThailandThailand
Forefront for investmentForefront for investment
World Bank Ease of Doing Business, Thailand ranks #18 in the world
UNCTAD Global Investment Prospects Assessment, FDI prospects in Asia 2005 – 2008: Thailand ranks #3
JBIC 2006 Survey on promising countries for overseas business operations over next 3 years: Thailand ranks #4
JBIC 2006 Survey on promising countries for SMEs over next 3 years: Thailand ranks #4
Grant Thornton International Business Owners Survey 2006:“Thailand’s assets include an entrepreneurial population, abundant natural resources and a wonderful lifestyle and, if these strengths are promoted and supported, the country will continue to be a great place to do business”
JBIC FY 2006 SurveyJBIC FY 2006 SurveyWhen asked about profitability for each region, including Japan, “the percentage of companies answering “higher” was greatest for Thailand”
Automotives, “strengthen or expand”response stronger in Thailand than any other region, including southern China and North America.
JBIC Survey: Companies Looking to JBIC Survey: Companies Looking to Strengthen or Expand in ASEANStrengthen or Expand in ASEAN--44
238
118102
86
50 3331
1022 12
55
1524
1050
50
100
150
200
250
All Industries E&E Automobile
ThailandVietnamIndonesiaMalaysiaPhilippines
Source: JBIC 18th Annual Survey Report on Overseas Operations by Japanese Manufacturing Companies
Comparison of Land and Office PricesComparison of Land and Office PricesBangkok Beijing Hanoi Jakarta Manila Singapore
40 – 45 45 - 50
1
7.02 –8.03
1,404 –1,605
4.1 – 4.6
79.54 -241.82
5.40 -13.64
22 - 8323 – 26
1,850 –2,100
1,924 –3,849
No Land Purchase
0.16 -0.23
22 - 45
3,200
Kuala Lumpur
Industrial Estate Purchase Rate (per sq/m)
61.60 57 - 70 5.5 -11
Monthly Industrial Estate Rents(per sq/m)
5.2 - 5.5 6 - 9 ---
Office Rent (per sq/m)
13.69 39 - 45 10.36 -15.11
Monthly Housing for Foreigners
1,779 2,300 –6,000
879 –1,236
Source: JETRO 17th Survey of Investment-Related Cost Comparison in Major Cities and Regions in Asia; prices are in US dollars
A CostA Cost--Effective WorkforceEffective WorkforceThailandThailand
Thai Labor ForceThai Labor ForceAverage Thai person works 2,184 hours/year, ranked #9 out of 55 countries surveyedThailand ranks as the number 6th
country of those surveyed for pro-business regulations(including minimum wage, hiring/firing practices)
Source: IMD World Competitiveness Yearbook, 2005
Average Monthly WagesAverage Monthly Wages
0
500
1000
1500
2000W
age
(in U
S$)
Bang
kok
Bang
alor
e
Beiji
ng
Han
oi
Man
ila
Jaka
rta
Kua
la L
ampu
r
General Industry Mid-Level Engineer Mid-Level Manager
Source: JETRO Survey, March 2007, based on top figure in average range
Increasing Labor ProductivityIncreasing Labor Productivity
0
50,000
100,000
150,000
200,000
250,000
2001 2002 2003 2004 2005
Baht/year
Source: Ministry of Labor
Human Resource DevelopmentHuman Resource Development
About 80,000 Students Graduated Annually in Science and Engineering
Comprehensive training and R&D for specific high-tech sectors, e.g.
National Science Park in electronics, material science, bio-technology, and nanotechnology
HDD Cluster Development Program
Thailand – Japan Institute of Technology
Thai Graduates in Science, Thai Graduates in Science, Technology, and EngineeringTechnology, and Engineering
Source: Commission on Higher Education; includes BA, MA, and post-graduate degrees
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2004 2005 2006 2007 2008 2009 2010
A WellA Well--Developed InfrastructureDeveloped InfrastructureThailandThailand
Low incidence of Power OutagesLow incidence of Power Outages
Percent of Production Lost Due to Power Outages
0 2 4 6 8 10
Malaysia
Thailand
China
Brazil
Indonesia
Philippines
India
Source: World Bank
Source: Eastern Water Resource Development and Management
Water Supply on Eastern SeaboardWater Supply on Eastern Seaboard
Economic Gateway: Regional NetworkEconomic Gateway: Regional Network
Source: NESDB
South Asia
Japan, China, Pacific, USA,...
West Gateway
Middle East, Europe, … Laem Chabang Laem Chabang Port:maxPort:max
capacity 18 capacity 18 TEUsTEUs
Rank: 12Rank: 12ndnd in the worldin the world
Airport Development as Gateway of Southeast AsiaAirport Development as Gateway of Southeast Asia
Source: NESDB
Auto & Auto Parts Industries
Thailand: Automotive Hub of Asia
0.001.002.003.004.005.006.007.008.00
200520082010
Million Units
AsiaAsia--Pacific Vehicle Production Pacific Vehicle Production Capacity 2005Capacity 2005--20102010
Automobile Forecast 2007Automobile Forecast 2007
ProductionProduction1,280,000 Units
Increase from last year 92,000 Units
Growth ~ 7.7%
Domestic SaleDomestic Sale700,000 Units
Increase from last year 18,000 Units
Growth ~2.6%
Export SaleExport Sale605,000 Units
Increase from last year 67,000 Units
Growth ~12.5%
Bangkok
Bangchan General Assembly
Y.M.C. Assembly
Thai Honda Manufacturing
Samutprakarn
Toyota Motor Thailand
Isuzu Motors (Thailand)
Siam Nissan Automobile
Siam V.M.C. Automobile
Thai Auto Work
Millennium Motors
Thai Yamaha Motor
Thai Swedish Assembly
Hino Motors (Thailand)
Thonburi Automotive
Assembly
Ayudhaya
Honda Automobile
(Thailand)
Pathumthani
Thai Suzuki Motor
Samutsakorn
Thai Rung Union Car
Rayong
Auto Alliance (Thailand)
General Motors (Thailand)
BMW Manufacturing (Thailand)
Kawasaki Motors Enterprise
(Thailand)
MMC Sittipol
Chachoengsao
Toyota Motor Thailand
Isuzu Motors (Thailand)
AUTOMOTIVEAUTOMOTIVE CLUSTERCLUSTERAutomotive Manufacturer Location
RayongTotal suppliers: 41
Body Parts: 24%, Engine Parts; Drive, Transmission &Steering Parts: 15% each, Suspension & Brake Parts: 12%, Electrical Parts: 10%, Accessories: 7%, Mold&Die: 2%, Other: 15%
SamutprakarnTotal suppliers: 158
Body Parts: 22%, Electrical Parts: 15%, Engine Parts; Drive, Transmission &Steering Parts: 8% each, Suspension & Brake Parts: 5%, Mold&Die: 4%, Accessories: 3%, Other: 36%
ChonburiTotal suppliers: 55
Body Parts: 25%, Engine Parts: 22%, Drive, Transmission &Steering Parts: 15%, Electrical Parts: 9%, Accessories: 5%, Suspension & Brake Parts: 4%, Mold&Die: 4%, Other: 16%
BangkokTotal suppliers: 232
Body Parts: 9%, Engine Parts; Electrical Parts; Drive, Transmission &Steering Parts; Accessories: 6% each, Suspension & Brake Parts: 4%, Mold&Die: 3%, Other: 60%
PathumthaniTotal suppliers: 39
Body Parts: 18%, Engine Parts; Electrical Parts: 13% each, Suspension & Brake Parts: 10%, Drive, Transmission &Steering Parts; Accessories: 8% each, Other: 31%
Principal Auto Parts Production SitesPrincipal Auto Parts Production Sites
AutomotiveAutomotive Hub of ASEANHub of ASEAN14 assemblers from Japan, US,and Europe Exports to 140 countriesLargest domestic pickup market in the world after the USMore than 700 first-tier suppliers 1,100 second and third-tier suppliers 2006 motorcycle production – more than 3.5 million units
Thailand: Automotive Hub of ASEANThailand: Automotive Hub of ASEAN
2006 production ~ 1,176,840 million units 2006 export ~ 539,206 units 15 assembly plants Largest in Southeast Asia Capacity of 2.0 million units by 2010 Production of pickup trucks ~ 877,890 units – world’s largest one-ton pick-up truck manufacturer
Major Auto Assembly Production CapacityMajor Auto Assembly Production CapacityCompany 2006 TotalToyota 450,000Isuzu 200,000Mitsubishi 208,000Auto Alliance (Ford/Mazda) 155,000Honda 120,000General Motors 160,000Nissan 134,400Hino 28,800DaimlerChrysler(2006) Others (2007) 16,300YMC Assembly 12,000BMW 10,000Volvo 10,000
Total 2006 1,576,500Projected total for 2007 1,627,710
Automotive Sales and ExportsAutomotive Sales and Exports
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Dom
estic
Sal
es (U
nits
0
100,000
200,000
300,000
400,000
500,000
600,000
Exp
orts
(Uni
ts)
Domestic Sales
Exports
Automotive ElectronicsAutomotive Electronics
Thailand’s 2006 auto electronics and parts industry valued at US$7 billion.Goal of becoming world-class auto electronics parts production center within 2011, with production to increase in value by US$1.4 billion.
Omron Automotive ElectronicsPioneer ElectronicsSummit Electronic ComponentsKyushu Matsushita ElectronicsPanasonic Automotive Systems
New import and corporate tax waivers (up to 8years, regardless of zone) to develop smaller, morefuel efficient cars
No more than 5 litres/100 kmEmissions compliant with Euro4 specification or higher
Carbon dioxide emissions no more than 120 gm/kmFull front and side impact protection based on UNECE specificationsInvestment applications starting March 2007
New EcoNew Eco--Car PromotionCar Promotion
Project package must be proposed along with:auto assembly, motor manufacture and motor vehicle parts project, andinvestment and manufacture plan for 5-yr period must be included, along with actual production quantity of not less than 100k units/yr from the fifth year
Qualify on MOI energy saving, environmental and safety specifications
General GuidelinesGeneral Guidelinesfor Ecofor Eco--car Incentivescar Incentives
215.44 505.28 722.79 883.421,245.65
1,758.56 1,796.412,182.00
2,909.43
4,100.74
5,026.38
0
2000
4000
6000
1996 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06
Unit: Million Baht
Spare Auto Parts ExportsSpare Auto Parts Exports
5,026.385,026.38
56.34 63.7141.35 119.96 141.19 145.26 171.53
797.48
683.42
43.66
690.37
0
200
400
600
800
1000
1996 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06
Vehicle Jig & Die ExportsVehicle Jig & Die ExportsUnit: Million Baht
0
20000
40000
60000
80000
100000
1996 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06
OEM Auto Component Part ExportsOEM Auto Component Part ExportsUnit: Million Baht
Stations
NGV Expansion TargetNGV Expansion Target
Type 2006 2007 2008 2009 2010 2011Benzene Car
22,890 52,000 74,700 101,000 128,000 160,000
Diesel Car 2,950 8,850 24,300 50,300 79,600 96,600
Total NGV 25,840 60,850 99,000 151,300 207,600 256,600
Region 2006 2007 2008 2009 2010 2011BKK/vicinity 73 181 212 253 277 285Countryside 31 89 138 172 203 250
Total stations 116 270 350 425 480 535
Vehicles
Opportunities in Automotive SectorOpportunities in Automotive SectorAlternative FuelsAlternative Fuels
NGV Assembly/ManufactureNGV Equipment (i.e. cylinders, conversion kits for gasoline and diesel engines)NGV Conversion Service NGV Service Stations
Government target:99,000 NGVs by 2008, replace 20% of oil consumption in the transport sector within the next 20 years
Passenger Car EnginesFuel Injection Pumps*Transmissions*Differential GearsInjection Nozzles*Electronic SystemsElectronic Control UnitsTurbo Chargers*Substrates for Catalytic convertersAnti-Lock Brake SystemsNGV Equipment target: 120,000 NGVs by 2008
Opportunities: Opportunities: Components not Components not Sufficiently Produced in ThailandSufficiently Produced in Thailand
Auto assembly for local and export markets under AFTA and other FTA arrangements
Auto part manufacturing to serve domestic and export markets
NGV segment target: 99,000 NGVs by 2008
NGV Assembly/Manufacture
NGV Equipment (i.e. cylinders, conversion kits for gasoline and diesel engines)
NGV Conversion Service
NGV Service Stations
Automotive Investment OpportunitiesAutomotive Investment Opportunities
Thailand continues to industrialize, but is dependent on foreign industrial machinery for immediate future.High demand for:
Food and farm machineryAlternative energy/energy conservation machineryTextile machineryAutomotive machineryMould & Die Industry
Opportunities in MachineryOpportunities in Machinery
Moulds for Die Casting- Engine block
- Crank shaft- Front case- Oil pan- Gear box – auto- Safety parts : Master pump & Clipper brake
Moulds for Plastic Injection- Automotive Electronic Control Unit (ECU)
- Housing for automotive steering column - Automotive dashboard- Parts for digital camera & cellular telephone- Parts for notebook computer and PDA (personal digital assistant)
Transfer press dies - Automotive body press die
More More Moulds & Dies Needed in ThailandMoulds & Dies Needed in Thailand
BOIBOIGlobalGlobalServicesServices
Focus 2007Focus 2007
Auto industryIncentives for “green car” production
Enhancing competitivenessThink tanks and academia
Human resources development
Skills, technology and innovation
Enhancing university linkages to promote productivity, Enhancing university linkages to promote productivity, technology and R&Dtechnology and R&D
Program Facilitator (BOI and S&T Institutes)
Technology andIndustry target
R&D FacilityPilot Plant
PotentialManufacturer
UniversitiesResearch Institutesand researchers
BUILD ActivitiesBUILD ActivitiesBUILD Activities
Provide information on subcontracting opportunities in Thailand via database web applicationsAssist foreign buyers wishing to source from Thai manufacturersMatch buyers and subcontractors in related businessesArrange participation of Thai manufacturers in trade shows and exhibitions abroad
Free ZonesFree ZonesForeign and domestic goods moved into FZsare eligible for tax and duty privileges, dependant on the goodImported machinery, equipment, and tools exempt from import dutyImported merchandise from other FZs, and exports, exempt from dutiesImports exempt from VATNo excise taxes for imports or manufactured goods in a FZ
THAILAND OF INVESTMENT
SUCCEEDSUCCEED
WWW.BOI.GO.THWWW.BOI.GO.TH
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